Annual Report 2007 - Severstal

OAO Severstal and subsidiaries
Notes to the consolidated financial statements
for the year ended December 31, 2007
(Amounts expressed in thousands of US dollars, except as otherwise stated)
29. Discontinued operations and assets held for sale
The Group’s discontinued operations consist of OAO Metallurgical Commercial Bank (presented the Group’s Financing segment) which was disposed of in
November 2007, and Lucchini companies which are classified as held for sale as at December 31, 2007, December 31, 2006 and December 31, 2005. The
post-tax loss on the disposal of OAO Metallurgical Commercial Bank amounted to US$ 10.2 million.
The results of discontinued operations and net cash flows were as follows:
Year ended December 31,
2007 2006 2005
Revenue 831 8,675 74,506
Expenses (2,914) (3,365) (81,537)
Other income/expenses 3,821 30,212 10,011
Profit before income tax 1,738 35,522 2,980
Income tax expense (1,305) (2,673) (2,378)
Profit for the year 433 32,849 602
Net cash (used in)/generated from operating activities (64,446) 148,650 (112,737)
Net cash (used in)/generated from financing activities – 17,779 (974)
The Group’s assets held for sale balances are mostly represented by Kuzbass coal mines, a group of subsidiaries, which the Group intends to dispose of
in the first half of 2008, and Lucchini and Metalware segment’s companies.
The major classes of assets and liabilities of the disposal group measured at the lower of carrying amount and fair value less costs to sell at
December 31, 2007, 2006 and 2005 were as follows:
December 31,
2007 2006 2005
Current assets:
Cash and cash equivalents 6,199 5,986 89
Short-term financial investments 18,550 – –
Trade accounts receivable 2,365 100 80
Amounts receivable from related parties 2,732 – –
Inventories 9,182 – –
VAT recoverable 1,808 – –
Income tax recoverable 422 3 4
Other current assets 5,160 – –
Total current assets 46,418 6,089 173
Non-current assets:
Long-term financial investments 2,540 514 –
Investment in associates 1 1,395 –
Property, plant and equipment 332,632 19,375 14,438
Intangible assets 30,710 50 –
Deferred tax assets 24,913 11 –
Other non-current assets 23,982 86,082 51,506
Total non-current assets 414,778 107,427 65,944
Total assets 461,196 113,516 66,117
Current liabilities:
Trade accounts payable 7,938 – –
Other taxes and social security payable 3,862 – –
Other current liabilities 6,980 – –
Total current liabilities 18,780 – –
Non-current liabilities:
Retirement benefit liability 9,260 – –
Other non-current liabilities 63,710 1,792 172
Total non-current liabilities 72,970 1,792 172
Total liabilities 91,750 1,792 172
Severstal Annual Report 2007 103